modern times. Its trackage and equipment compared favorably with similar
systems, and most of its extensions and branches had been wisely planned
and had proved profitable. The operating management of the railroad was
generally good and it usually secured its proportion of what business
was to be obtained. But the steady increase in its debts over a number
of years, its extravagance in dividend payments, and its painful efforts
to keep down its operating expenses had so weakened the property that,
when the hard times of 1893 to 1896 arrived, it was in no position to
weather the storm. The only wonder is that the management succeeded in
keeping the system intact and apparently solvent so long as it did.

The receivership at once adopted a vigorous policy of improvement.
The rolling stock had run down until it could not handle even ordinary
business. While the company had been depleting its credit and paying out
all its cash in dividends, the equipment had been going into the scrap
heap. For two years the receivers made large expenditures on equipment
and roadbed, borrowing money for this purpose; the result was that
when, in 1898, the courts surrendered the property, it was in splendid
condition to take advantage of the tide of commercial and industrial
prosperity which was just then beginning to flow throughout the United
States.

While the reorganization of the Baltimore and Ohio was not so drastic
as that of many other systems which went through the courts during this
period, it was thorough enough to meet the situation. The fixed charges
were cut down radically and the stockholders were assessed in large
amounts. In all, more than thirty-six million dollars was raised by
assessments and the sale of new securities; the liabilities of the
Company were greatly reduced; and its credit was promptly restored.
Formerly the Baltimore and Ohio had been struggling under a burden of
floating indebtedness, with so little money in its treasury that it
could not even put a new coat of paint on the passenger cars and had to
continue to use oil lamps to light some of its best trains. But now the
floating debt was replaced by a large available cash capital, and as a
result of the liberal policy followed by the receivers, the equipment
and roadbed were brought fully up to the standards required for handling
the traffic of the road both economically and effectively.

With the reorganization of 1898 finished, the Baltimore and Ohio
R